Credit Score in India – Why must your credit SCORE always SOAR?

February may not be the ideal time for many of us to plan a foreign trip or expect any discounts online. With summer approaching, the months of March, April and May could be ideal to embark on a foreign trip to a cooler destination to beat the heat.

All this however, could end up for naught if you do not have the required credit score. Your credit score could be low for a variety of reasons – failure or delayed payments of EMIs, too many credit applications in a short span of time, or errors in your credit report, can portray a poor score. As you apply for an online loan, it is important to ensure that your credit score is good enough to get you a personal loan.

A smart salaried individual is someone who embraces the financial mistakes of the past and then acts on it to correct them. Through this piece, we want to focus on people who have a low credit score and are certain to face a rejection. Let’s look at who prepares your credit report, why the score is so important, and how to turn it around.

Free Credit Score Check

There are 4 licensed credit information bureaus namely CIBIL, Experian, Equifax and Highmark. Out of these, CIBIL is the most accessed credit bureau. As the name suggests, a credit bureau is a bureau that houses your credit information. It maintains the information sourced from credit institutions such as banks, credit card companies, debt collection agencies and the government. Credit bureaus look at your credit repayment patterns to determine how much of a risk you pose to the credit lending institution. Whenever you go to a credit institution for fresh credit, a hard inquiry is raised by the institution to the credit bureau. The inquiry is basically a request to fetch your credit repayment history. The bureau then sends the history back to the institution in the form of a credit bureau report; with a compiled numerical score called credit score.

A credit score is a reflection of your monthly payments of loan EMI and credit card bills. It also considers the above mentioned hard inquiries. The score is accompanied with your personal information such as name, date of birth, residential address, corporate address, PAN, Voter ID, contact details along with figures for the loan amount, credit card limit, outstanding current balance, etc. Credit institutions consider your credit score while taking a decision on your loan application. A poor score means you are a potential risk. Because it gives an overall picture of your credit responsibilities in the past, it is a trusted system followed by credit institutions.

Credit Score Range in India

The credit score has a minimum value of 300 and a maximum value of 900. The higher your credit bureau score, the better are your chances of getting credit from credit institutions like banks, digital lending platforms and credit card issuing companies. The credit score ranges are mentioned below

Score less than 0 – A credit score of 0, or less, means that you have no credit history. It is wise to apply for a personal loan from a digital lending platform such as Loan Singh because banks are sure to reject your loan application. Although, you may be a first time credit applicant with a ‘-1’ score, Loan Singh requires you to provide your latest 6 months’ bank statement in PDF format.

Score between 350-500 – A score between 350 and 500 is poor, indicating either a default in past EMI payments or excess credit utilization on credit cards.

Score between 550-650 – A score in this range is acceptable; it indicates that you have been regular with your payments and can be trusted for fresh credit. The chances of getting a loan approved are good.

Score between 650-750 – This range indicates that you are doing well with your finances. You should stick to your financial habits to maintain or improve your score. The chances of getting a loan approved are great.

Score between 750-900 – This is considered the best range for a borrower. This clearly indicates that you have been regular with your EMI or credit card bill payments. You can avail a loan with ease.

6 Tips To Improve Your Credit Score

By now you know how critical your bureau score is for your personal loan approval. Fret not! We now provide you 6 tips on how to improve your credit score.

Avoid late repayments – This is easily the most important reason for a poor credit score. You must ensure that you repay your EMIs and bill statements on time – each month. If you don’t know which sudden expenses could come-up the next time, have some emergency funds in place. Set-up an auto debit feature so that your EMIs are directly debited from your account by the credit institution.

Avoid maxing out your card limit – Keep your credit card spending at a low. Aim at spending only up to 40% of your limit. Don’t try to apply for a 2nd credit card if you are struggling with the first card itself. This will lead to a double jeopardy of rejection along with a hit to your credit score.

Maintain a healthy mix of credit – You must ensure that you have a good mix of credit, i.e. a mix of personal loan, secured loan and credit cards. This tells the credit institution about your experience of servicing debt. In case you have no credit history, yours truly (read Loan Singh) will still approve your personal loan request.

Prevent closing multiple cards at once – In case you own multiple credit cards, and are planning to close one or two immediately, do so at periodic intervals. Closing a credit card means closing that card’s repayment history, which will anyway reduce your credit score. Also, remember to close the newest cards first.

Avoid a credit avail frenzy – Do not apply for fresh credit, at multiple institutions, within a short span of time. Too many inquiries, in a short span of time, will indicate desperation for credit and will affect your credit bureau score.

Check for errors in your credit report – Apply for your credit report just before you want to apply for fresh credit. This way you will know which errors are present on your report, and you will have a chance to rectify it. Dispute the errors, and apply for a new report to see if the changes are updated by the bureau, or not.

Personal Loan Benefits in India

Loan Singh’s hassle-free process and quick approval personal loans are perfect for salaried individuals like you who are too busy to even get a rest. The attractive EMIs and interest rates at Loan Singh, make personal loans affordable to repay back. Add luxury to your mundane lives without putting too much strain on your finances. Your dreams are our dreams. We help turn your dreams into reality. Brand new appliances and electronic products are also needed in case you are relocating due to your job. The job relocation personal loan at Loan Singh helps cover exactly this.

Loan Singh’s emi calculator will help you understand how much you need to pay in order to clear your consumer durable loan. The calculator only needs your intending loan amount and tenure for telling you how much you need to pay each month. A personal loan can be availed between Rs. 50,000 and Rs. 10 Lakhs.

Another huge benefit you have with a Loan Singh online personal loan is that you have the freedom to choose where you want to spend your loan amount on. You can apply for a shopping loan and utilize the cash to spend on an Amazon, some on Flipkart or some on Snapdeal. Unlike so many ecommerce websites that let you gain discounts for possessing a debit card or points of a particular finance provider, Loan Singh’s personal loan can be utilized to be spent on the website you want and on the product you want to spend on.

About Loan Singh

Loan Singh is a digital lending platform that prides in providing online personal finance loan or unsecured personal loan to salaried individuals. You can apply for quick funds as an easy emergency loan which is not a bank loan. We provide a loan with the best personal loan interest rates. The instant funds, or instant loans, are loans between Rs. 50,000 and Rs.10,00,000 taken for purposes such as: